Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 4690 OF 2022
(Arising out of SLP (C) NO.19226 OF 2021)
UTPAL TREHAN .... APPELLANT(S)
VERSUS
DLF HOME DEVELOPERS LTD. .... RESPONDENT(S)
WITH
CIVIL APPEAL NOS. 46914692 OF 2022
(Arising out of SLP (C) NOS.58715872 OF 2022)
J U D G M E N T
ANIRUDDHA BOSE, J.
Leave is granted on the limited question which was
formulated by this Court at the time of issue of notices, by the
rd
order passed on 3 January 2022 in SLP (C) No.19226 of 2021.
So far as SLP (C) Nos.58715872 of 2022 are concerned, leave
is granted on the point on which the appellants thereof had
Signature Not Verified
Digitally signed by
Rajni Mukhi
Date: 2022.07.11
18:49:20 IST
Reason:
th
confined their grievances, recorded in our order passed on 19
1
April, 2022. We shall refer to these points later in this
judgment. The controversy which we shall address in this
judgment revolves around the quantum of compensation that
the appellant in SLP (C) No.19226 of 2021 (now appeal) would
be entitled to receive because of delay in delivery of possession
of a flat as also the appellant’s obligation to pay maintenance
charges in respect thereof.
The specific disputes giving rise to these appeals relate to
2.
rd
an Apartment Buyers’ Agreement, executed on 3 December,
2008 between Utpal Trehan (whom we shall henceforth refer to
as “allottee”) and DLF Home Developers Limited (we shall refer
to them as the “builder”) for purchase of a flat, within a
complex named New Town Heights in Sector91, Gurgaon (now
Gurugram), Haryana. This was booked by the allottee on
depositing a sum of Rs.5 lakhs in March 2008. The allotment
th
letter was issued on 16 April 2008, and allocation was made of
Apartment No. GBD153 along with its parking. As per the
Apartment Buyers’ Agreement, the area of the flat was to be
1760 square feet (super area). The consideration amount was
Rs.45,12,000/, to be paid as per instalment payment plan
2
forming part of the Agreement. The stipulation relating to
possession of the flat is contained in Clauses 11 and 17 of the
said Agreement. A copy of the draft Agreement has been
annexed to the allottee’s paper book. In substance, the time for
possession has been stipulated to be within 36 months from
the date of execution of the Agreement subject to certain
qualifications and exceptions incorporated in the Agreement
itself. This date of delivery of possession, along with the effects
thereof, underwent certain changes, as there was delay on the
part of the builders in getting certain regulatory clearance. Mr.
Pinaki Mishra, learned Senior Advocate has appeared for the
builder and the allottee has appeared in person before us.
3. The facts forming genesis of the grievances of the allottee
have been summarised in the decision of the National
Consumer Dispute Redressal Commission (“National
rd
Commission”) delivered on 23 July 2021, which is under
appeal before us. We quote below the relevant passages from
this decision:
“ 12. ….. The allotment letter dated 16.04.2008 and
Annexure3 to the Apartment Buyer’s Agreement
dated 03.12.2008 provided a "Time Linked Payment
Plan” under which 95% of the sale consideration
3
(including Rs. 5,00,000/ of booking amount) had to
be paid in 11 instalments starting from 29.05.2008
and ending on 29.06.2010. Vide Clause12 of the
Allotment Letter dated 16.04.2008 and Clause11 of
Apartment Buyer's Agreement dated 03.12.2008, the
possession had to be handed over within 36 months
from the date of agreement. Environment Clearance
Certificate was delayed as such the builder could not
start construction till May, 2009, i.e. more than one
year from booking. In such circumstances, the builder
through letter dated 26.03.2009, amended the terms
of the agreement and the payment of the instalments
were changed as “construction Linked Payment
Plan”. The builder has simultaneously provided
various benefits to the buyers, i.e. Advance Payment
Rebate in the shape of interest at the rate of 13% p.a.
on the amount in excess of 35% of sale price as on
26.03.2009, 5% discount of basic sale price, increase
of approximately 5% area and compensation for
delayed possession @ Rs.10/ per Sq. ft. per month
from the date of expected possession till actual
possession and Timely Payment Rebate, equivalent to
10% basic sale price. Letter dated 23.06.2009 and
statement of account dated 10.06.2013 prove that the
benefits of (i) Rs.9059/ as Advance Payment Rebate,
(ii) Rs. 1,98,000/ as 5% discount of basic sale price
and (iii) increase of 5% area have been given to the
complainant.
The complainant argued that “Timely Payment
13.
Rebate” and “compensation for delay in possession”
had not been given in statement of the account dated
10.06.2013, for which he was entitled. The builder
has denied the Timely Payment Rebate on the ground
that in spite of service of demand letter dated
29.12.2011, the amount due was not deposited till
last date i.e. 18.01.2012, rather it was deposited on
27.01.2012 (without including the amount of interest
accrued on it in the meantime). As the time was
essence of contract and this instalment was not
deposited in time as such the complainant was not
entitled for Timely Payment Rebate.”
(quoted verbatim from paperbook)
4
We shall discuss separately the position of the respective
parties as regards obligation of the allottee to pay maintenance
charges.
4. The allottee had approached the Delhi State Consumer
Disputes Redressal Commission (“State Commission”), in the
month of May 2015, after the builder had raised additional
demands under different heads. As per the allottee, the total
sum, as demanded, added upto Rs.9 lakhs approximately.
Otherwise, the allottee claims to have had cleared the requisite
instalments. At that point of time, the main complaint of the
allottee was of being deprived of certain payment related
benefits on being offered possession of the flat. He was being
denied these benefits, since as per the builder, the allottee had
made default in payment within the due date on demand of the
developer of the ensuing instalment. As would be apparent from
the said passages of the decision under appeal, the builder’s
th
contention is that by a notice of 29 December 2011, the
th
allottee was to pay the next instalment by 18 January 2012,
th
but this was paid on 27 January 2012. The builder thus
alleged nine days’ delay. The allottee’s stand on this count, on
5
th
the other hand, was that he had not received the notice of 29
nd
December 2011, but on receiving a reminder on 22 January
th
2012, he cleared the dues on 27 January of that year.
5. The delivery and payment stipulations were modified on
account of delay in getting environmental clearance and these
modifications, as made by the builder, has been summarised in
the passage quoted above from the National Commission
decision. So, we are avoiding a repeat of these modification
terms in this judgment.
6. Before the State Commission, the allottee prayed for the
following reliefs:
“4. ……. i. Give the possession of the said flat at the
earliest.
ii. Pay an amount of Rs. 10,00,000/ as compensation for
causing mental trauma and agony to complainant due to
delay in giving the possession.
iii. Also pay additional delayed possession rent @ Rs.
15/ sq. ft. till the possession is offered to complainant.
iv. Further waive of the undue/unjustifiable demand
already raised towards the final dues settlement.
v. To pay Rs. 50,000/ towards the expenses incurred by
the complainants towards telephonic communications and
personal visits made to OP since 2006.
6
vi. To pay a sum of Rs. 75,000/ towards the payment of
litigation expenses.”
(quoted verbatim from paperbook)
During pendency of the proceeding before the State
7.
Commission, an application was filed by the builder to bring on
record certain subsequent events. What was sought to be
brought on record included crediting to the allottee
compensation for delayed possession of Rs.4,22,816/, Timely
Payment Rebate of Rs.4,02,076/ and interest of Rs.14,082/.
This application also highlighted that certain sum of money was
already credited to the allottee’s account under the head of
Early Payment Rebate. This application also showed the liability
of the complainant (i.e. the allottee) of Rs.3,16,899/ as
maintenance charges, Rs.96,000/ as IBM charges and
Rs.14,18,203/ as holding charges. The said application
appears to have been filed subsequent to an attempt at
mediation while the dispute was pending before the State
Commission.
8. The State Commission found that there was deficiency in
service and the complaint was allowed in following terms:
7
“20. …… i. OP shall issue fresh offer of possession of the
apartment in question i.e. GBD153, New Town Heights in
Sector91, Gurgaon to the complainant and shall handover
the possession of the apartment to the complainant within
a period of 06 weeks.
ii. OP shall also execute the sale deed/conveyance deed
and get it registered in the name of the complainant on
payment of stamp duty, registration charges and other
incidental charges, if any, by the complainant, within a
period of one month thereafter.
OP shall pay to the complainant the delayed compensation
@ Rs. 10/ per sq. ft. per month for the delayed period
from the agreed date of possession i.e. March, 2011 till the
date of fresh offer of possession after adjusting the
delayed compensation already paid to the complainant.”
(quoted verbatim from paperbook)
9. On the question of maintenance charges, however, the
State Commission went against the allottee, holding :
“ 19. As regards payment of Rs 3,16,899/ towards
maintenance charges, and Rs.14,18,204/ toward holding
charges @ Rs. 10 per square feet till 11.10.2018, as is
stated in the aforesaid handing over the cheque issued
earlier a new cheque can be issued against the same.
As on date, the complainant is liable to make the
following payment as per the agreement:
i. Maintenance charges (till 30.09.2018) – Rs.3,16,899.
ii. IBMS (Interest Bearing Maintenance Security) – Rs.
96,000/
iii. Holding Charges (@ Rs. 10/ per sq. ft. till
11.10.2018) – Rs.14,18,203/.
However, upon suggestions from this Hon’ble Commission,
the opposite party shall consider waiving the holding
charges accruing day by day and hence, nothing remains
payable to the opposite party. The maintenance security
and the maintenance charges incurred towards upkeep of
the multistorey building as mentioned above shall be
payable to the Condominium Association who are
maintaining the property inquestion since the date the
8
property was ready for possession and was
conveyed/offered to the complainant.”
(quoted verbatim from paperbook)
One of the critical issues which was examined by the
10.
State Commission was as to whether there was any delay in
payment of instalment by the allottee upon demand being
made. This question arose as the builder had denied certain
benefits to the appellant which would have accrued to him if
timely payment of instalments was made on demand. The
th
builder alleged that the demand in this case was made on 29
th
December 2011 requiring the allottee to make payment by 18
January 2012. As we have already discussed, the allottee took
th
the plea that the letter of 29 December 2011 was never
th
received by him and when he received a reminder letter of 19
nd
January 2012 on 22 January 2012, he made the payment on
th
27 January 2012, factoring in certain holidays which
intervened. The State Commission examined this issue and
gave a finding on fact that the material on record did not
th
establish that the demand notice of 29 December 2011 was
served on any adult family member/known person of the
allottee and that the developer had failed to prove service of
9
demand notice upon the allottee. The State Commission thus
held that the allottee could not be deprived of the benefits
th
outlined in the builder’s letter of 26 March 2009 on the
allegation of failure to pay instalment within due date.
11. The appeal of the allottee to the National Commission
was mainly against the finding given by the State Commission
on maintenance charges. The builder questioned legality of that
part of the decision of the State Commission under which they
were directed to issue fresh offer of possession and payment of
delayed compensation.
12. The National Commission partly allowed both the
appeals, interalia holding:
“In view of aforementioned discussions First Appeal No.
1530 of 2019 is partly allowed and First Appeal No. 1638
of 2019 is partly allowed. DLF Home Developers Ltd., (the
builder) is directed to (i) offer possession of the apartment
in dispute to the complainant afresh and hand over
possession to the complainant within 6 weeks and execute
the sale/conveyance deed in his name, within one month
thereafter, on payment of stamp duty, registration charges
and other incidental legal charges, (ii) pay compensation
for delay in possession, i.e interest @ Rs. 6% per annum
on the sale price deposited by him for the delayed period
from July, 2013 till the date of fresh offer of possession,
adjusting “Early Payment Rebate” of Rs.95,136/ as
mentioned in statement of account dated 10.06.2013 and
(iii) pay “Timely Payment Rebate” i.e 10% of basic sale
price. The builder is entitled to realise/adjust the
Maintenance charges, from the date of issue of Occupation
10
Certificate and cost of increased area (i.e. the area
increasing to 5% of the increased area). The builder shall
pay a cost of Rs.50,000/ to the complainant to meet out
his litigation and other expenses.”
(quoted verbatim from paperbook)
13. So far as the allotee’s appeal is concerned, (arising out of
SLP (C) No.19226 of 2021) at the time of issue of notice, this
Court had passed the following order:
“Heard petitioner in person.
Issue notice limited to the question of maintenance
charges as provided for by NCDRC in the concluding part
of the order impugned. Notice may be made returnable in
four weeks.
Dasti service in addition to order in process permitted.”
In the appeal filed by the builder, at the stage of issue of
14.
notice on the petition for special leave to appeal, it was recorded
th
in our order of 19 April 2022 that the learned counsel
appearing for the petitioner, (i.e., the builder) essentially
confined his submissions to the grievance of the petitioner
developer in regard to the directions by the National
Commission and the State Commission for making ‘a fresh offer
of possession’. We have indicated earlier in this judgment that
we are granting leave restricted to these two questions only.
15. We shall first deal with the question of directions to pay
to the builder maintenance charges. In the definition Clause
11
and Clauses 19, 20 and 39 of the Apartment Buyer’s Agreement
rd
dated 3 December 2008, it has been specified:
“Definitions
……
means DHDL or association of
Maintenance Agency"
allottees or such other agency/body to whom the
maintenance of the Said Building/Said Complex (including
common areas and facilities) is handed over by DHDL and
who shall be responsible for providing the maintenance
services within the Said Building /Said Complex and who
shall be entitled to collect the Maintenance Charges.”
“19. Maintenance of the Said Building/Said
Complex/Said Apartment
In order to provide necessary maintenance services, upon
the completion of the Said Building/ Said Complex the
maintenance of the Said Building/Said Complex may be
handed over to the association of Apartment allottees or
such other agency/ body/ company/ association of
condominium. The Allottee agrees to execute Maintenance
Agreement (draft given in Annexure VII to this Agreement)
with the Maintenance Agency or any other nominee/
agency or other body/ association of Apartment owners as
may be appointed by DHDL from time to time for the
maintenance and upkeep of the Said Land/the Said
Building/the Said Complex. This Agreement shall not be
deemed to be executed till the same is signed by all the
parties. The Allottee further undertakes to abide by the
terms and conditions of the Maintenance Agreement and
to pay promptly all the demands, bills} charges as may be
raised by the Maintenance Agency from time to time.
DHDL reserves the right to change, modify, amend, impose
additional conditions in the Maintenance Agreement at the
time of its final execution. The Maintenance Charges shall
become applicable/ payable from the date DHDL has
received the occupation certificate/the date of allotment
whichever is later. It is further clarified that DHDL may at
its sole discretion hand over the maintenance of the Said
Building/ Said Complex to anybody/association of
Apartment owners of the Said Building/Said Complex
including but not limited to any body/ association of
condominium of the Said Building/ Said Complex, as the
case may be, at any time before/ after the construction of
12
the Said Building/ Said Complex is complete either for
each building or for the entire Said Complex and the
Allottee specifically gives his consent to this proposal. It is
further specifically clarified that the draft Maintenance
Agreement, set out in Annexure VII to this Agreement is
merely an indicative Agreement that is proposed to be
entered into with the Allottee for maintenance and upkeep
of the Said Building/ Said Complex, however, if at any
time, after having taken over the Said Building/ Said
Complex, the said association of Apartment owners/
condominium of association decides to modify, alter, add,
delete any one or more of the terms and conditions of the
Maintenance Agreement, the Allottee shall not have any
objection to the same and shall execute the Maintenance
Agreement as may be required by the Maintenance Agency
or association of Apartment owners or association of
condominium or its nominees or assigns.
20. Fixation of total Maintenance Charges
The total Maintenance Charges shall be more
elaborately described in the Maintenance Agreement (draft
given in Annexure VII). The Maintenance Charges shall be
levied from the date of occupation certificate or the date of
allotment, whichever is later and the Allottee undertakes
to pay the same promptly. It is agreed by the Allottee that
the payment of Maintenance Charges will be applicable
whether or not the possession ofSaid Apartment is taken
by the Allottee. The Maintenance Charges shall be
recovered on such estimated basis which may also include
the overhead cost on monthly/quarterly intervals as may
be decided by the Maintenance Agency and adjusted
against the actual audited expenses as determined at
every end of the financial year and any surplus/deficit
thereof shall be carried forward and adjusted in the
maintenance bills of the subsequent financial year. The
estimates of the Maintenance Agency shall be final and
binding on the Allottee. The Allottee agrees and
undertakes to pay the maintenance bills on or before due
date as intimated by the Maintenance Agency.
……
39. Association of apartment owners
The Allottee agrees and undertakes to join association/
society of apartment owners as may be formed by
DHDL/Company on behalf of Apartment owners and to
pay any fees, subscription charges thereof and to complete
such documentation and formalities as may be deemed
necessary by DHDL/ Company for this purpose.”
13
(quoted verbatim from paperbook)
16. Annexure VII to that Agreement appears at Page 185 of
the paperbook in SLP (C) No. 19226 of 2021, which is in the
form of a draft. The actual copies of the Agreements, if
executed, have not been annexed to the paperbooks filed in
either of these two appeals. No material has otherwise been
produced before us to show if the Maintenance Agreement
(Annexure VII to the main Agreement) was executed or not. Be
that as it may, even if we proceed on the basis that the
maintenance Agreement is applicable, the same constitutes a
tripartite Agreement involving the builder, New Town Heights
Condominium Association, a registered society and the
purchaser. This is in the format of a standard form Agreement
with several portions thereof left blank. In the counter affidavit
of the builder, it has been stated that the maintenance charges
are not paid to them but to the statutory condominium
association of allotees who actually renders maintenance
services recovered from each allotee. That association to us
appears to be an independent body and there is nothing on
record to demonstrate that such association is an agent of
14
either the builder or the purchasers. In Clause 39 of the
Apartment Buyers’ Agreement, there is hint that such an
Association might be formed by the builder but no particular of
its formation, or for that matter, its existence have been shown
before us at the time of hearing.
17. The definition of Maintenance Agency means “DHDL (the
builder) or association of allottees or such other agency…….”
but the conjunction “or” as has been applied in the definition
clause ought to mean in the alternative and this definition
cannot be construed to infer that even after handing over the
maintenance work to an association, the builder shall continue
to remain as a maintenance agency entitled to collect
maintenance charges. The clause relating to fixation of total
maintenance charges only specifies the obligation of an allottee
to pay such charges and the substantive Agreement specifies
again that the maintenance charges would be payable to the
maintenance agency.
18. In so far as the subject dispute is concerned, the
builder’s case, as stated above, is that the maintenance agency
is to receive the maintenance charges but no specific case has
15
been made out that the builder themselves are carrying on the
maintenance work, which could have brought them within the
definition of maintenance agency under the main Agreement. In
such circumstances, we are unable to appreciate as to how, in
dealing with the allotees’ complaint against the builder, the two
statutory fora passed orders which effectively required the
allotee to make over payment as maintenance charges to a third
party, the association in this case. We have already observed
that from the materials on record, no principalagent
relationship has been established between the builder and the
association as regards the Maintenance Agreement entitling the
builder to claim and receive maintenance charges. The builder,
at best, is facilitator in organising a maintenance agency. The
overall obligation of a flat buyer to pay maintenance charges
may be derived from interpretation of clause 20 of the main
Agreement. But without any claim from the entity, who are to
render maintenance services and charge for the same, in our
opinion, the two statutory fora ought not to have directed the
allottee to make payment of maintenance charges. The National
and the State Commissions, in our opinion, have committed
error in directing the allotee to make payment of maintenance
16
charges, which ought to have been paid to the association when
there was no claim from the association in the first place.
Secondly, nothing has been brought to our notice from which it
could be inferred that the builder had the authority to represent
the association for collecting maintenance charges. On the
other hand, as we have already indicated, the builder’s own
case is that the maintenance charges ought to be paid to the
association. The latter (i.e., the association) has not been
impleaded as a party at any stage of these proceedings. Nor
they have prosecuted any claim.
19. We must point out here that from the two orders of the
State and the National Commissions, we do not find that the
point on right of the builder to claim maintenance charges was
specifically discussed. In the complaint before the State
Commission, point was taken that in absence of delivery of
possession, charging for maintenance by the association was
unjustified but the principle which we have discussed in the
preceding three paragraphs are purely legal issues and goes to
the root of the dispute relating to payment of maintenance
charges. Moreover, question of law formulated in paragraph 2D
17
of the allottee’s special leave petition (now appeal), in our
opinion, is broad enough to cover this issue. While determining
rights of parties on a question of law which emerges from the
pleadings and crystallises for adjudication, we cannot ignore
answering that question. For otherwise, an incorrect principle
of law may have to be laid down on account of failure of the
litigants in raising it in clear terms. Moreover, the nature of the
dispute having originated from a consumers’ grievance, the role
of the Court has to be beyond just being an adjudicatory forum
in an adversarial cause, and must have an element of
proactivity in public interest. Having returned a specific finding
on this point, we do not consider it necessary to deal with the
allottee’s contention that claim of maintenance charge was
unjustified in absence of possession of the subjectflat being
delivered to them.
20. Now we shall turn to the legality of the decision under
appeal issuing direction upon the builder to make payment of
delayed compensation. The provision relating to delayed
compensation is contained in Clause 17 of the main
Agreement:
18
“17. Failure to deliver possession : Remedy to DHDL:
The Allottee agrees that if the construction and
development of the Said Complex is abandoned or
DHDL is unable to give possession within thirty six
(36) months from the date of execution of this
Agreement or such extended periods as permitted
under this Agreement, DHDL shall be entitled to
terminate this Agreement whereupon DHDL's liability
shall be limited to the refund of the amounts paid by
the Allottee with simple interest @ 6% per annum for
the period such amounts were lying with DHDL and
DHDL shall not be liable to pay other compensation
whatsoever.
However, DHDL may, at its sole option and
discretion, decide not to terminate this Agreement in
which event DHDL agrees to pay only to the
Allottee(s) and not to anyone else and only in cases
other than those provided in Clauses 14, 15, 16 and
50 and subject to the Allottee not being in default
under any term of this Agreement, compensation @
Rs. 5/ per sq. ft. of the Super Area of the Said
Apartment per month for the period of such delay
beyond thirty six (36) months or such extended
periods as permitted under this Agreement. The
adjustment of such compensation shall be done only
at the time of conveyancing the Said Apartment to the
Allottee first named in this Agreement and not
earlier.”
(quoted verbatim from paperbook)
As there was delay in obtaining regulatory clearance for
21.
the project, the builder themselves had made certain
modifications in the terms of the Agreement, providing certain
benefits to the flat buyers. This was done by the
th
communication dated 26 March 2009 (at page 223 of the
19
paper book in the allottee’s appeal). The relevant portion of this
communication reads:
“As far as "New Town Heights" is concerned, we
would like, to mention here that the necessary
Building Plan Approvals for all the sectors of “New
Town Heights” have been received. As you know, we
are a highly compliant organisation, and we would
like to start construction only after we have received
the final Environment Clearance, which is awaited.
As soon as we receive the same, we shall commence
the construction. However, to allay any fear that you
might have as far as the handing over period is
concerned, we hereby revise the Compensation
Clause No. 17 of the Agreement to Sell, to the extent
of doubling the Compensation payable to Rs. 10/
psft per month, as against Rs. 5 / psft per month,
that was applicable earlier. Similarly, if the customer
delays in taking over the possession once the
possession is offered by the Company, he/she shall
also be liable to pay Holding Charges at the same
rate, ie., Rs. 10/ psft per month, for the delay
involved in taking over the possession.
We stand behind our promised date of delivery as 3
years, as we have already communicated earlier. We
have amended this clause to "3 Years from the date
of booking" instead of '3 years from the date of
Agreement', which was the earlier commitment.”
(quoted verbatim from paperbook)
The direction of the State Commission on delayed
compensation has already been quoted in this judgment. The
National Commission, however, modified this directive, which
has also been quoted in the earlier paragraph. This
modification has been questioned by the allotee.
20
Paragraphs 15 and 16 of the National Commission’s
22.
decision disclose the reasoning for modifying the directive of the
State Commission upon the builder to pay delayed
compensation. Such modification is as regards the quantum of
compensation and the relevant part of the National
Commission’s order is reproduced below:
“ 15. So far as the compensation for delayed
possession is concerned, the complainant has
accepted part of the benefits given under the letter
dated 26.03.2009 and is claiming remaining benefits.
By this letter, mode of payment of the instalments
were changed as “construction Linked Payment
Plan”. The construction was started in May, 2009.
After adjusting the amount till March, 2009 and the
benefits given by the letter dated 26.03.2009, on it,
the complainant was asked to deposit instalment
some time in 2010. Demand notice dated 16.03.2012,
shows that Terrace Floor Slab was completed at that
time and demand notice dated 18.06.2012 shows
that the builder had applied for issue of Occupation
Certificate, which has been issued on 28.02.2013.
Thereafter, final accounts of the buyers were
prepared and possession was offered through letter
dated 10.06.2013. Due to delay in starting
construction payment schedule of the instalments
was changed and to mete out suffering of the buyers,
various benefits were provided. Delay in offering
possession had occurred as construction could not be
started for more than one year of booking. lf the
buyers were required to payment instalments on later
dates than the dates fixed in the agreement, then
how it can be expected that the possession could be
given within three years of the agreement. In the
circumstances, the builder was justified in not giving
compensation for delayed possession in the
statement of account dated 10.06.2013.
21
16. However, as we found that the complainant was
entitled for "Timely Payment Rebate” as such
statement of the account dated 10.06.2013 and
demand on its basis was illegal. In such
circumstances we direct the builder to pay 6% p.a.
interest on the amount deposited by the complainant
toward basic sale price, as compensation for delay in
possession from July 2013 till date of offer of
possession as directed by Supreme Court in Wg. Cdr.
Arifur Rahman Khan Vs. DLF Southern Homes
Pvt. Ltd., (2020) 16 SCC 512. ”
(quoted verbatim from paperbook)
23. We are, however, unable to accept this reasoning. So far
as start of the running time for quantifying delayed payment of
compensation from March 2013 is concerned, we find that the
builder themselves had modified the relevant clause by their
letter dated 26th March 2009, amending the starting date for
computing delayed payment of compensation from end of three
years from the date of Agreement to three years from the date of
booking. Thus, the date of booking in the case of the allottee
being March 2008, the State Commission had rightly directed
payment of delayed compensation from March 2011.
24. Mr. Mishra has urged that the entire responsibility for
delivery of possession of the flat should not fall on his clients as
the allottee himself could have applied before the adjudicatory
forum for possession thereof subject to outcome of the case.
22
But this argument in our view is fallacious. The dispute
between the parties primarily arose as the builder denied
substantial benefits to the allottee for nine days’ delay in
clearing instalment. This allegation of delay has been rejected
by the Consumer Fora and their concurrent finding is that no
proper demand was made for payment of such instalment. Mr.
Mishra has, in his submissions, emphasised on the “offer for
th
possession” letter dated 10 June 2013 and his submission is
that obligation to pay delayed payment compensation cannot go
beyond that date. The builder’s case is that they cannot be held
responsible if the allottee does not take possession of the flat,
when offered. A copy of this letter has been annexed at page
235 of the builder’s paperbook. On a plain reading of this letter,
we find that the builder offered physical possession only on
remitting of payments as per statement of accounts, which was
for a sum of Rs.9,00,382/ and on furnishing an undertaking.
The National Commission found that the statement of account
th
dated 10 June 2013 and demand on that basis was illegal. As
the offer for possession was conditional on settling of accounts
and, as the accounts reflected illegal demand, the builder
cannot argue that there was a valid offer for possession under
23
th
the letter dated 10 June 2013. In this background, in the
event the allottee wanted proper adjudication of his rights and
liabilities before asking for interim possession of the flat which
would have had carried with it unspecified obligations, no fault
can be found in such conduct of the allotee.
25. Reliance has been placed on the judgments of two
coordinate Benches of this Court in the cases of DLF Homes
Panchkula Pvt. Ltd. vs D.S. Dhanda and Ors. [(2020) 16 SCC
318] and
DLF Home Developers Ltd. And Another vs Capital
Greens Flat Buyers Association & Ors. [(2020] SCC Online SC
1125] in support of the argument of the builder that “Delay
Compensation” could be awarded only upto the date of offer of
possession. But in this case, we have already held that there
was no valid offer for possession. In the case reported in
[(2020) 16 SCC 318], interest was directed to be paid by way of
compensation on deposited amount from the promised date of
possession to the actual date of handing over possession, and
the coordinate Bench directed, interalia, payment of interest at
the rate of 9% per annum for a period of two months from the
date of offer for possession. In the case of Capital Greens Flat
24
(supra), interest was awarded as
Buyers Association
compensation for delay in delivery of possession. The latter
judgment was delivered in the special circumstances of that
case. We accept the argument advanced on behalf of the
builder that time for payment of compensation for delayed
payment shall stop running from the date of offer for
possession. But in this case, there was no valid offer for
possession. Mr. Mishra also sought to bring to our notice the
proposals made in course of mediation proceeding. But
mediation obviously failed between the parties and we cannot
refer to what transpired during the process of mediation while
adjudicating the right of the parties in an appeal.
The ratio of the judgment in the case of
26. Wing
Commander Arifur Rahman Khan and Aleya Sultana and
Others vs DLF Southern Homes Pvt. Ltd. and Others [(2020)
16 SCC 512] does not apply in the facts of the present case. The
aforesaid decision was rendered in a context in which a
coordinate Bench of this Court found the Agreement involved in
that case was lopsided, giving unjustified advantage to the
25
builder. The relevant paragraph from the judgment is
reproduced below:
| “25. | The only issue which then falls for | ||
|---|---|---|---|
| determination is whether the flat buyers in these | |||
| circumstances are constrained by the stipulation | |||
| contained in Clause 14 of ABA providing | |||
| compensation for delay @ Rs 5 per square feet per | |||
| month. In assessing the legal position, it is necessary | |||
| to record that the ABA is clearly onesided. Where a | |||
| flat purchaser pays the instalments that are due in | |||
| terms of the agreement with a delay, Clause 39(a) | |||
| stipulates that the developer would “at its sole option | |||
| and discretion” waive a breach by the allottee of | |||
| failing to make payments in accordance with the | |||
| schedule, subject to the condition that the allottee | |||
| would be charged interest @ 15 per cent per month | |||
| for the first ninety days and thereafter at an | |||
| additional penal interest of 3% p.a. In other words, a | |||
| delay on the part of the flat buyer attracts interest @ | |||
| 18% p.a. beyond ninety days. On the other hand, | |||
| where a developer delays in handing over possession | |||
| the flat buyer is restricted to receiving interest at Rs 5 | |||
| per square feet per month under Clause 14 (which in | |||
| the submission of Mr Prashant Bhushan works out to | |||
| 11.5% interest p.a.). Would the condition which has | |||
| been prescribed in Clause 14 continue to bind the flat | |||
| purchaser indefinitely irrespective of the length of the | |||
| delay? The agreement stipulates thirtysix months as | |||
| the date for the handing over of possession. | |||
| Evidently, the terms of the agreement have been | |||
| drafted by the developer. They do not maintain a | |||
| level platform as between the developer and | |||
| purchaser. The stringency of the terms which bind the | |||
| purchaser are not mirrored by the obligations for | |||
| meeting timelines by the developer. The agreement | |||
| does not reflect an even bargain.” |
27. So far as the present appeals are concerned, the
quantum of delayed compensation has been enhanced by the
26
builder themselves, along with provision for enhancement with
respect to the delay in payment if made by the allottee in taking
possession. In such circumstances, we do not think the
National Commission ought to have had deviated from the
modified contractual terms contained in the communication
th
dated 26 March 2009 and replace the said terms with 6%
interest per annum from July 2013 till the date of fresh offer of
possession was made. In our opinion, on the point of payment
of delayed compensation, the State Commission’s view was the
right view.
28. Now comes the question as to which date shall be treated
to be the date for fresh offer of possession. Both the fora have
directed the builder to issue fresh offer of possession as per the
dates specified in the order. The directions of the State and
National Commissions were not to operate with retrospective
th
effect, from 10 June 2013. The argument of the builder is that
a possession offer letter was issued on that date. This letter
showed certain sum of balance and also included certain
demands on account of cost of increase in apartment size area,
further EDC and IDC charges, stamp duty charges, etc. Some
27
rebates were also denied to the allottee on account of delay in
payment of instalment by nine days, which we have discussed
in the preceding paragraphs of this judgment. In an application
th th
dated 15 November 2018, which was filed on 7 January 2019
before the State Commission, the builder admitted their fault in
not providing any compensation for delayed payment in the
th
aforesaid letter of 10 June 2013 and prayed that the
complainant (i.e., the allottee) be directed to pay excess amount
as specified in the said application and take possession of the
apartment. The State Commission found that, as per the said
application, the builders had admitted wrong calculation in
settling the credits in the account of the allottee. In fact, the
builders then had given the credit for a sum of Rs.2,40,210/
and issued a cheque for the said sum, which the allottee did
not encash. Such conduct on the part of the allottee was
justified as the dispute was still pending before the State
Commission. The State Commission found deficiency of service
on the part of the builder by sending wrong statement of
accounts along with the letter of possession and as per the
finding of the State Commission, the allottee was deprived in
taking possession of the flat, which was offered, because of
28
these factors. The National Commission did not take a contrary
view and in fact came to a finding that the statement of account
th
dated 10 June 2013 and demand on that basis was illegal.
These findings arrived by the two fora were on appreciation of
evidence and we do not find any perversity in such finding. So,
th
the letter of 10 June 2013 cannot be treated as a valid offer
letter.
(i) We, accordingly, hold the finding of the National
29.
Commission as also the State Commission that the allottee
would be required to pay maintenance charges as
erroneous and that part of the findings of the two
Commissions are set aside.
(ii) The entity to whom such charge is due has not raised
any claim. In such circumstances, direction to the allottee
to pay maintenance charges was not warranted as the
entity entitled to receive such charges is not a party to
these proceedings. Such directions assume the character of
declaration of liability or obligation of the allottee in
absence of the admitted claimant, who had not brought any
action or staked their claim in any other manner through
29
these proceedings. Such declaratory relief cannot be given
in vacuum.
(iii) We sustain the order of the National Commission as
also the State Commission that fresh offer of possession
ought to be issued. We extend the time for issuing such
offer of possession by a period of eight weeks from this
date. Execution of Deed shall be effected within the
aforesaid period.
(iv) We modify the direction of National Commission relating
to payment of delayed compensation and while restoring
the directions of the State Commission, we direct that
delayed compensation be paid at the rate of Rs.10 per
square feet per month for the entire period from March
2011 till the date on which the fresh offer of possession is
issued.
(v) The delayed possession compensation shall be paid to
the allottee after adjusting the delayed compensation
already paid. The early payment rebate of Rs.95,136/ shall
also be adjusted, as has been directed by the National
30
Commission. The said sum was mentioned in the statement
th
of account dated 10 June 2013.
(vi) We retain the order as to costs to be paid to the allottee
quantified by the National Commission as Rs.50,000/.
30. Both the appeals are disposed of in the above terms. We,
however, make it clear that in this judgment, we have
addressed only the two questions on which leave is granted.
Rest of the findings or directions of the National Commission
shall remain undisturbed.
31. Connected applications, if any, shall stand disposed of,
without any order as to costs.
………………………………., J.
(DINESH MAHESHWARI)
………………………………., J.
(ANIRUDDHA BOSE)
NEW DELHI;
th
11 JULY 2022
31